COMMISSIONER OF INCOME TAX DELHI COMMISSIONER OF INCOME TAX BIHAR PATNA Vs. BANSI DHAR AND SONS:CHATHURAM BHADANI

JUDGEMENT

(1.) The main question involved in these appeals is the question of jurisdiction of the High Court, to grant stay or pass interim orders in pending references under Section 66 of the Indian Income Tax Act, 1922 (hereinafter called the Act of 1922) and Section 256 of the Income Tax Act, 1961 (hereinafter called the Act of 1961). These appeals are by Special leave from the judgment of the High Courts. The main judgment is the judgment of the Delhi High Court in the case of L. Bansi Dhar and Sons v. Commissioner of Income-tax, New Delhi (C.A.No. 1668/78). The question arose in applications filed by the assessee under Section 151 of CPC in two Income-tax References Nos. 82 and 83 of 1973 relating to the assessment years 1960-61 and 1962-63 respectively praying that the High Court might be pleased to grant an order of injunction for restraining the Commissioner of Income-tax (I), Central Revenue Building, and/or his subordinate officers including the Income-tax Officer. Company Circle (III), from enforcing and/or realising the demand raised in the aforesaid assessment years 1960-61 and 1962-63, and from taking any steps for the recovery thereof till the disposal of the references pending in the High Court.

(2.) The assessee is a Hindu undivided family. The Karta of the HUF is Lala Bansi Dhar. His father, Lala Murlidhar, died in the year 1949 in an air crash. On the death of the father, a sum of Rs. 2,49,874/- was received by Lala Bansi Dhar from the insurance company on account of an accident insurance policy covering the risk of the life of the deceased. The income derived from the said amount was treated as the income of Lala Bansi Dhar and was assessed in his personal assessment. Lala Bansi Dhar was married on 3rd February, 1953, and a son, Tilak Kumar, was born on 3rd February, 1956. The income from the insurance amount continued to be assessed in the personal assessment of Lala Bansi Dhar even after formation of the HUF on his marriage and the birth of a son and continued to be so assessed till the assessment year 1959-60.

(3.) In the assessment year 1960-61 for the first time, the Income-tax Officer treated the income from the insurance amount as that of the HUF and assessed the income in the hands of the HUF. On appeal by the assessee, HUF, the Appellate Assistant Commissioner set aside the assessment holding that the income was the personal income of Lala Bansi Dhar and not of the HUF. Against that order, the revenue preferred an appeal to the Income-tax Appellate Tribunal. A similar appeal was also preferred to the Tribunal by the revenue for the assessment year 1962-63. Both the appeals were disposed of by the Tribunal by a common order on 23rd November, 1970 whereby it was held that the income in question was that of the HUF and was liable to be assessed as such. Then at the instance of assessee-HUF, the Tribunal referred to the High Court the following question under section 256(1) of the Income Tax Act, 1961, as arising out of the said common order namely: